ROYAL Bank of Scotland chief executive Stephen Hester yesterday hit out at the forced disposals demanded by Brussels as the price the bank should pay for an unprecedented level of Government support.

RBS chief exec Stephen Hester is fighting to return value to the taxpayer

He said the European Commission’s “unexpected” moves to make RBS sell its stake in a commodities joint venture, insurance operations and its credit-card processing arms would hamper recovery plans, adding: “They neither improve competition or make our task in returning value to the taxpayer any easier. We feel the job has been made more difficult.”

Hester warned that Government-imposed plans to make all employees earning £39,000 a year or more take annual bonuses in shares left the bank a “sitting duck” to rivals looking to poach key staff and would make recruitment harder. RBS shares fell 2¼p to 36p.

The bank will also have to sell 318 branches under the Williams & Glyn name to meet EC requirements. Hester said 6,000 staff and 1.7 million customers involved now faced an “uncertain” future.

Hester hoped the sale of the branches, the Sempra commodities trading business and Global Merchant Services would be completed next year. RBS plans to float the insurance business, which includes Direct Line, Churchill and Green Flag, in the next four years, the time frame Europe has imposed for disposals to be made.

Europe also said RBS’s investment banking arm, Global Banking & Markets, should not be ranked higher than fifth in world. Hester said this would have an impact “at the margins” but would not affect the group seriously. The only bright spot is the bank will not be forced to sell US business Citizens.

RBS is the biggest recipient of state aid across the Continent after the Government yesterday said it would inject a further £25.5billion to support it and a further £8billion should the group hit a crisis. The taxpayer’s stake in the bank will rise from 70 per cent to 84 per cent.

RBS directors will have to defer bonuses for three years.

Hester said he was not doing the job for the money but for the sense of “accomplishment” a successful turnaround would bring.

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